Regulators gonna regulate, part 2

Oh hi! I'm Taylor! I'm married! I'm also the CEO of Hedgehog, the service that makes it easy-peasy to track your whole crypto portfolio in one place. Sync your wallets, sync your exchange accounts, and you're good to go.

Thanks for all the congrats by the way! Yes the wedding was a blast, yes I said yes (obviously), and no our vendors would not accept bitcoin as a payment method.

Don't miss the giveaway question at the end of the newsletter. Enter to win a Ledger Nano S that will keep your coins under lock and key. (Not literally, but close enough.)

Previously:

Alright, let's dive right in with some hard hitting news that doesn’t involve the fresh prince.

"Fuck around and find out" is practically the motto of the crypto industry. We tend to be pretty happy to experiment and see what happens. But when it comes to securities law and enforcement… we prefer to find out and then fuck around. But since crypto is still super new and the regulators haven't quite wrapped their minds around it, we don't always — uh — get to choose.

The DeFi Education Fund put together a website calling attention to the latest SEC shenanigans: "In a nutshell, the proposed rule would potentially require any organization, association, or group of persons that 'makes available' a 'communication protocol system' (CPS) to comply with financial regulations designed for organizations like the New York Stock Exchange if the CPS allows people to interact and agree to terms of a trade."

I ain’t no lawyer, but “communication protocol system” could include anything under the sun, such as email? Like, is open-source wallet software fair game for the SEC now? What about DAOs? Or Firefox? A couple of exceptions were specified, but otherwise it’s very unclear:

The language is so broad that even the proposal itself clarifies web chat providers like Facebook Messenger and utilities like cell phones — which could meet the novel definition of a CPS — would not be required to register as securities exchanges (footnote 72). If utilities and web chat providers could be captured, what couldn’t?

In the words of dissenting SEC Commissioner Hester Peirce: "What the staff is recommending … is an expansion in the definition of exchange that would apply to any trading venue, including so-called communication protocol systems, for any type of security, not just for government or fixed-income securities."

The public can comment on this plan until April 18. DeFi Education Fund's website for the issue has instructions, plus a draft comment to use, if you want to weigh in.

Meanwhile, from Coin Center, a nonprofit focused on public policy decisions that affect the industry: "New crypto sanctions bill targets publishing code, facilitating transactions." Also sounds bad!

Tldr: You get regulated! And you get regulated! Everyone gets regulated!

Axie Infinity's Ronin sidechain / ETH bridge set a new record by getting massively hacked for $600 million.

• "Community Alert: Ronin Validators Compromised"
• News writeup, + another one

From that second writeup:

This theft will be remembered not just for its size, but for the surreal lack of awareness shown by the Ronin team.

It seems unthinkable that their key infrastructure was not monitored, with the only alert coming from a concerned user days later.

Tldr: Funds that aren't secured will be helpfully secured by someone else.

What even is a decentralized exchange actually? The HedgeBlog has gotcha covered:

DEXes have smart contracts, which are algorithms that execute the transactions when the conditions are met. It’s like there's a robot that has specific instructions to execute orders when certain criteria are fulfilled. Unlike humans, it's easier to trust an unbiased robot to carry out transactions because at least they won't steal it for themselves!

That said, the robot definitely needs to be actively monitored so nobody else fools it into being naughty 🥸 Read the rest of our primer on DEXes.

Tldr: Robots! They're the future! DEXs! They're also the future! Henceforth therefore I digress that robot DEXs are the future's future! Which is also the future! Woooo!

Plenty to chew on, right?

Now it's giveaway time. Just respond to this email with your answer to be entered to win a Ledger Nano S hardware wallet. This week's question: Do you actually use Hedgehog, just read these emails, or both? (I promise you'll be eligible to win no matter what your answer is. Of course I prefer both, but only if it's the truth!) Bonus points for explaining why.

Still marinating in post-wedding bliss,
— Taylor

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